Digital India: Internet users doubles but digital transactions lags

Most reports talk about internet advertising size, the number of internet users in India. But what most internet ventures want is to see is the digital consumer spending, preferably often. Boston Consulting Group & Google’s Feb 2018 report throws some light on this topic.

  • Number of internet users (Dec 2017): 430 Mn, growth of 2x in 4 years
  • Smartphone users: 68 million (2013), 430 million (2017), 4.7x growth in 4 years
  • Reasons for this 2x growth: Cheaper smartphones ($120), cheaper data (73% fall in 2 years, Jio factor), mobile-specific / local language content
  • New users will come from non tier-1 cities and women
  • Digital transactions in India: 1/3rd of China, 1/4th of US
  • Only 1 in 5 (20%) internet users in India shop online
  • Only 1 in 6 (16%) do travel booking online
  • Very few want to pay for digital content (paywalls will not work)
  • Current (2017) quantum of digital transactions: $40 billion, can grow to $100 billion by 2020
  • The need for ‘Touch & Feel’ and discounts are the biggest barriers to shopping online

Digital Transactions Adoption in India

Adoption of Digital Transactions

When compared to previous years the number of internet users in India transacting online would have increased. That is the good news. The bad news is we have a long way to go, which in fact could be good news for internet companies as they would see there is a lot of headroom for growth.

Post Demonetization in India (Nov 2016), the number of people using internet banking, wallets increased. Demonetization forced many people to start transacting online.

I firmly believe two departments in the Govt of India embraced online transactions well before ecommerce became big in India – Income Tax Department of India & Indian Railways (ticketing).

Indian Language Support Can Increase Digital Transactions in India

Year English Users (Mn)Indian Language Users (Mn)
2016175234
2021199536
Source: “Indian Languages — Defining India’s Internet”, KPMG & Google Report 2017

The above data in the table above is self-explanatory. The same report says 9 out of 10 new internet users between 2016 and 2021 will use local languages. 99% of Indian-language smartphone users access the internet using their smartphones, against a national average of 78%. Why would you not invest in the future – local languages?

Very few transactional portals have done a decent job in adopting Indian languages in their product. Most Central government sites are under the assumption a Hindi version of the site caters to all language users of India. Do only English and Hindi speaking people in India pay Income Tax? Obviously not. Income Tax dept should have gone the whole nine yards and made their site available in all Indian languages.

Travel portals could have increased their business a lot more if they had embraced Indian languages.

In my opinion, BookMyShow is the only e-commerce site in India which has done justice to Indian languages. Kudos to their team.

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